# Question: suppose that the demand and supply functions for good x...

###### Question details

- Suppose that the demand and supply functions for good
*X*are

Q_{d} = 56 – 2P_{X} +
0.01M +7P_{R}

Q_{s} = -600 +
10P_{X}

Where P_{X} is the sales price
of good X, M is average consumer income, P_{R} is the price
of a related good.

- Is good X a normal or inferior good?
- Are good X and R complements of substitutes? Explain?

Suppose M = $50,000 and P_{R}= $20

- What is the direct demand function for good X?
- What is the equilibrium price and quantity?
- What is the market outcome if M rises to $60,000, other things being equal?
- What is the market outcome if price is of good P
_{R}is decreases to $14 other things being equal (M= $50,000? - What happens to equilibrium price and quantity if the supply
function becomes Q
_{S}= - 360 + 10P_{X}, for the original demand function and the original values for M and P_{R}?